The Central Bank of Nigeria (CBN) unveiled fresh measures late on Friday aimed at curbing foreign currency transactions conducted by Bureau de Change (BDC) outlets.
The move is part of President Bola Tinubu’s comprehensive reforms to address the depreciation of Nigeria’s naira currency, which has reached record lows in the parallel market.
In a statement, the CBN outlined the new regulations, stating that the spread between buying and selling rates offered by BDC operators should remain within a permissible range of -2.5 percent to 2.5 percent of the previous day’s Nigerian foreign exchange market window-weighted average rate.
Additionally, the central bank mandated BDCs to furnish daily, weekly, monthly, quarterly, and annual transaction reports as required by regulations. Non-compliance with reporting obligations may lead to sanctions, including the revocation of operating licenses, the bank warned.
Operators within the Bureau de Change subsector, which plays a crucial role in the retail foreign exchange market, welcomed the regulatory measures.
President of the Association of Bureau de Change of Nigeria (ABCON), Aminu Gwadabe, expressed optimism about the developments, noting that they mark the initiation of BDCs’ integration and recognition into the new harmonized Investors and Exporters (I&E) window.
He said the move paves the way for BDCs to address the retail segment’s demands in the official window, contributing to market stability in a volatile sector.
He emphasized the importance of adhering to the circular’s requirements and highlighted the potential for active BDC liquidity through various windows, including those operated by banks and international money transfer agencies.
“What this portends is the opportunity for BDCS to play as a third leg of the official window in meeting the demands at the critical retail end of the market where volatility is pervasive.
“However, for any BDC to be considered, it needs to comply with the requirements of the new circular, especially in terms of return rendition to the regulators.
“Finally, what we expect from the CBN and the way forward is to make BDC liquidity active through windows like banks autonomous windows and the agency of international money transfer operators.
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The new regulatory stance follows announcements made by acting central bank governor Folashodun Shonubi on August 14 as pressure mounted on the naira.
Earlier in the week, the state oil firm NNPC Ltd. secured a $3 billion loan, resulting in the naira’s sharp rebound on the parallel market to N860 against the U.S. dollar, compared to a previous record low of N960 earlier in the week.
Since June, when the central bank lifted trading restrictions, the naira’s value has experienced significant fluctuations in the official market, depreciating by over 40 percent. The recent measures align with President Tinubu’s efforts to stabilize the currency and foster economic resilience.
(Edited by Oludare Mayowa; firstname.lastname@example.org; Newsroom: +234 8033 964 138)